Christopher Mims
I'm feeling disagreeable so here goes:
I think the narrative that "Silicon Valley broke its own bank and it's another example of how tech is broken" is complete hokum, and exonerates the actual villains here.
Bank runs happen all the time.
They are what happen when you have insufficient bank regulation.
The bipartisan bill of 2018 that let SVB dodge good banking rules is the actual problem here.
This is not a tech issue, it's a banking one.
pettter
@mimsical nah, while banking regs _might_ have helped, they can't stop all bank runs, especially not when driven by the kind of herd mentality that VC funders are so very prone to.
There's a whole lot of things that would have made this Not Happen, including SVB just thinking for three minutes about interest rate risk and correlation with startups.
Amy Hoy
@mimsical both things are true.
yes the banking regulations loosened — by silicon valley specifically demanding them — which made the initial error possible
but a handful of VCs called up their portfolio companies and triggered a bank run of billions within hours — something virtually impossible to trigger for any normal bank w normal customers — when the bank would’ve been able to recover from the MINOR deficit if given a little bit of time & ecosystem support
Christopher Mims
@amyhoy yep, this is the view I’ve come around to
elle mundy
@mimsical @amyhoy it sounds like they pump and dumped their own bank. see: greg becker sitting on the fed, greg becker calling for those looser regulations, greg becker cashing out days beforehand
Amy Hoy
@exchgr @mimsical the NYTimes has a vested interest in making all kinds of malice sound like just incompetence, it’s practically their current mandate
Christopher Mims
after reading the nytimes "what happened inside..." piece, I think it might be just incompetence not malice, tho
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